By Andi Anderson
Iowa farmland values have plateaued following two years of record highs due to several factors, including rising interest rates, declining profits, and drought. Despite this slowdown, farmland prices in Iowa remain close to record levels, with a 0.6% increase in September compared to the previous year, as reported by the Realtors Land Institute-Iowa Chapter.
The Chicago Federal Reserve also showed a 2% increase in July compared to a year earlier. While the market is no longer experiencing the aggressive double-digit growth observed in previous years, it is described as steady.
In 2022, farmland values increased by 10.4% over 2021 to an average of $13,742 per acre, following a substantial 43.3% jump to $12,450 per acre in 2021 compared to 2020. However, through June of this year, average farmland values decreased by 2.6% to $13,385 per acre compared to the previous year.
Rising interest rates have played a significant role in softening the farmland market, as they are the fastest-growing farm production expense, increasing by 19.1% in 2023 and 33.2% in 2022. Additionally, farm debt is expected to reach record highs this year.
Farmland rents in Iowa have climbed by 17% since 2020, averaging $269 per acre this year, impacting approximately 60% of Iowa farmers who lease cropland.
Iowa farmland values have plateaued, they remain at historically high levels, and the market is described as steady, though not experiencing the rapid price increases seen in previous years. Rising interest rates and increasing farm debt are contributing factors to this stabilization.
Photo Credit: gettyimages-jimfeng
Categories: Iowa, Crops